Chris McGurk

“Take the old distribution model and throw it in the waste basket,” says Chris McGurk. It is a sentiment that would have sparked an outcry in his days as CEO of Overture Films or COO of MGM. Nowadays he is chairman and CEO of digital distributor Cinedigm Entertainment Group and times are changing fast. “Theatrical is usually important to expose product,” McGurk explains over breakfast in Los Angeles, “but you’ve got to be much, much smarter about distribution. That means not trying to chase box office for box office’s sake.”

Looking for something new after the closure of Overture, McGurk joined the publicly traded Cinedigm in January 2011. At the time, the company was best known for converting cinemas for digital projection. That remains a core business, but since McGurk’s arrival Cinedigm has sold off a digital delivery unit to Technicolor and a pre-show advertising unit to Screen Vision and evolved into a fully fledged distributor of independent films and alternative content.

‘Theatrical is important to expose product, but you’ve got to be much smarter about distribution’

Chris McGurk, Cinedigm

“We are the leading digital cinema company in North America,” McGurk says. “A lot of that was a platform for us to do more things. The digital conversion is almost done. We are going to hit probably 12,500 screens, which is above what we originally projected. We have taken 275 exhibitors digital [in the US]. We have got this huge footprint of software we have installed and most importantly, good relationships with distributors and other studios.”

Approximately 95% of theatre seats in the US stay empty from Monday through Thursday and Cinedigm aims to plug the hole. “There is a huge demand [among exhibitors] for more independent films and alternative content… [and]… it’s getting worse because the studios are giving them less. Exhibitors are very concerned and that’s why you see companies like Open Road [founded by AMC and Regal] starting up.”

With Cinedigm’s operational and servicing software businesses steaming ahead, it was time to step up content acquisition. In April the company paid $14m for home-entertainment specialist New Video, bolstering Cinedigm’s status as an ancillary transactional sales supplier feeding VoD and digital platforms.

Over the summer McGurk brought in former Millennium Entertainment executive Vincent Scordino as vice-president of theatrical acquisitions to head the content acquisition team. The plan is to work on an annual pipeline of 20-25 independent films a year. Cinedigm has acquired rights to seven or eight titles so far and notable theatrical releases in 2012 have included Kirby Dick’s documentary The Invisible War and hit SXSW horror film Citadel. Cinedigm’s alternative content roster has featured FIFA World Cup football matches and a Foo Fighters concert in 3D.

Social networking

While the company, with a market cap hovering around $65m by mid-October that has reached $81m in the last 52 weeks, can mount wide releases — for example a partnership with ARC Entertainment put action doc Nitro Circus: The Movie on 800 screens — Cinedigm wants to rely increasingly on social media to create a small footprint and reach target audiences in what McGurk calls “narrowcasting”.

“We think releasing an independent film on 100-200 screens and doing a targeted marketing spend and maybe getting the movie to $1m is smarter than chasing a movie to do $10m and getting it to 500 or 700 screens.”

Cinedigm has also just unveiled an alliance with distributor Alloy Digital to deliver packaged content from Alloy’s Smosh and Clevver Media YouTube channels to ancillary platforms. The partners intend to funnel content into theatres and develop alternative content and “other indie film ventures” likely to cover the family, horror and urban genres.

Beyond that, international expansion is on the cards. A July report by investment bank Merriman Capital said that while digital deployment in international markets lagged behind North America by two to three years, there was a “potential end market of 46,000 screens” available for conversion by Cinedigm.

McGurk adds that the team is looking to forge lasting relationships with producers and financiers from around the world. “We need to have smart local boots on the ground.”

Chris McGurk

1982-88 Key finance and operational roles at PepsiCo

1988-96 CFO of Walt Disney Studios, then president of the Motion Picture Group

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